According to TechCrunch, the Competition Commission of India's 2022 order set aside NRAI's complaints about delayed payments, one-sided contract clauses and steep commission, saying they did not seem to affect competition. It found a prima facie case on some conduct, treating most seriously the claim that Zomato and Swiggy place their own cloud kitchen brands on their apps.
Who complained, and about what
In April 2022, TechCrunch reported on the Competition Commission of India (CCI) order that opened an antitrust investigation into Zomato and Swiggy, having reviewed the order itself. The complaint was filed by NRAI, the National Restaurant Association of India, a body TechCrunch says represents more than 500,000 restaurants across the country.
As CCI's order describes it, NRAI accused the two platforms of:
- Bundling delivery services with food orders
- Masking data from the restaurants listed on them
- Running cloud kitchens of their own
- Imposing "unfair and one-sided contracts" on restaurant outlets
- Delaying payment cycles
- Charging exorbitant commission
The complaints CCI set aside
Several of NRAI's grievances did not get past the first stage. The order said allegations about the delayed payment cycle, one-sided clauses in agreements and exorbitant commission did not appear to have "an effect on competition" on the facts of the case.
In the same order, CCI found that "there exists a prima facie case" on some of the platforms' conduct and sent it to the Director General for investigation. So the regulator did not accept every restaurant complaint: the commission and contract points were dropped at this stage, and what went forward was narrower.
The allegation that led to the investigation
The complaint CCI's order treats most seriously is about how the platforms are built. NRAI alleged that Zomato and Swiggy play a "dual role": they run marketplaces for independent restaurants while also placing cloud kitchen brands they own on those same apps, and only there, "akin to private labels". NRAI argued this creates an "inherent conflict of interest".
Put simply, the platform is both the marketplace and a seller competing inside it. CCI told the Director General to examine whether this conduct breached Sections 3(1) and 3(4) of the Competition Act, read together, and to report within 60 days of the order.
What else was going on at the time
TechCrunch placed the probe among several pressures on both companies:
- Zomato, then doing poorly on the stock market, was exploring instant food delivery, which TechCrunch noted would make its relationship with restaurant partners more complicated, not less.
- Swiggy's January 2022 Series K round had put its value at $10.7 billion, and it was reported to be aiming for an IPO raising up to $1 billion.
- Bernstein analysts quoted in the piece expected India's food services market to reach $97 billion by March 2026.
What this means for your restaurant
- CCI's 2022 order did not treat delayed payments, one-sided contract terms or high commission as competition problems on the facts before it, so this case was not the route for settling them. Raise those points directly with the platform when you negotiate or renew.
- Find out whether any brands you compete against on the app are owned by the platform. That dual role was the conduct CCI's order treated most seriously.
- Use NRAI's list of complaints, from data access to contract terms and payment cycles, as a checklist of clauses to understand before you sign or renew a platform agreement.
Sources
This article summarises the reporting and guides listed above; the figures belong to those sources and are attributed in the text. Check anything that affects your business against your own platform agreements, payout statements and advisers.